The primary objective of this study is to compare the blood glucose lowering properties of NN304 insulin given once daily with that of Human NPH insulin given once daily, as measured by effect on diurnal plasma glucose profiles in subjects with Type 2 diabetes mellitus. The secondary objective is to compare the incidence of hypoglycemia, the day-to-day variation of FBG, changes in fructosamine, insulin profiles, and standard safety parameters.